REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2535/2023

(@SLP (C) No. 14884/2022)

R. HEMALATHA ...APPELLANT(S)

VERSUS

KASHTHURI …RESPONDENT(S)

JUDGMENT

M. R. Shah, J.

1. Leave granted.

2. Feeling aggrieved and dissatisfied with the

impugned judgment and order passed by the

High Court of Judicature at Madras at

Signature Not Verified Madurai passed in Revision Application

Digitally signed by R
Natarajan
Date: 2023.04.10
16:38:20 IST
Reason:

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 No.1877 of 2017 dated 01.02.2022 by which

the High Court has allowed the said revision

application preferred by the respondent herein

by quashing and setting aside the order passed

by the learned Trial Court passed in I.A.

No.159 of 2017 in O.S. No.199 of 2014 by

further directing that the document in

question shall be received in evidence in the

suit for specific performance, the original

defendant has preferred the present appeal.

3. The facts leading to the present appeal in nut­

shell are as under:

2.1 That the respondent herein is an original

plaintiff (hereinafter referred to as “original

plaintiff”) instituted civil suit being O.S. No.199

of 2014 for specific performance of the

Agreement to Sell dated 10.09.2013. After the

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chief­examination of the plaintiff as PW­1, on

the application filed by the appellant – original

defendant, a preliminary issue was framed by

the learned Trial Court on the admissibility of

the Agreement dated 10.09.2013 in evidence. It

was the case on behalf of the defendant that in

view of the Tamil Nadu Amendment Act No.29

of 2012 to the Indian Registration Act, under

which the instruments of agreement relating to

sale of immovable property of the value of

Rs.100/­ and upwards is compulsorily

required to be registered, the said unregistered

document shall be inadmissible in evidence.

On the other hand, relying upon Section 49(a)

and (c) of the Act, it was submitted that an

unregistered Agreement to Sell can be admitted

as evidence of a contract in a suit for specific

performance. The learned Trial Court held the

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 preliminary issue in favour of the defendant

and against the plaintiff by observing that the

unregistered Agreement dated 10.09.2013

shall not be admissible in evidence.

2.2 Feeling aggrieved and dissatisfied with the

order of the learned Trial Court, the plaintiff

preferred the present revision application

before the High Court. By the impugned

judgment and order, the High Court has

allowed the revision petition relying upon

Section 49 of the Registration Act by setting

aside the order passed by the learned Trial

Court and directed that the agreement in

question be received in evidence considering

the fact that the suit in question is a suit for

specific performance, which falls within the

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 first exception carved out in the proviso to

Section 49.

2.3 The impugned judgment and order passed by

the High Court directing to receive the

unregistered Agreement to Sell in evidence in

a suit for specific performance, the original

defendant has preferred the present appeal.

3. Learned counsel appearing on behalf of the

appellant herein – original defendant has

vehemently submitted that in the facts and

circumstances of the case, the High Court has

materially erred in directing to receive the

unregistered agreement in evidence.

3.1 It is submitted that it is an admitted position

that the Agreement to Sell dated 10.09.2013

which is the foundation or basis of the suit is

an unregistered Agreement to Sell and

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 therefore cannot be exhibited in evidence for

the main purpose in the suit, in view of the

Tamil Nadu Amendment to Section 17 of the

Registration Act making an Agreement to Sell

to be compulsorily registered with effect from

01.12.2012.

3.2 It is submitted that the “explanation” attached

to sub­clause (2) of Section 17 which also

relates to Agreement to Sell has been omitted.

It is submitted that said explanation was

inserted by Amendment Act, 1927, to

overcome the judgment of the Privy Council in

the case of Dayal Singh vs. Indar Singh,

(1926) 24 LW 396. It is submitted that in that

case, an advance paid under an Agreement to

Sell being a charge on the property as per

Section 55(6)(v) of the Transfer of Property Act

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 was held to create an interest and hence,

unregistered Agreement to Sell cannot be

admitted in evidence. The explanation

remedied the situation and save the

Agreement to Sell from the requirement of

compulsory registration.

3.3 It is submitted that Section 54 of the Transfer

of Property Act states that an Agreement to

Sell by itself does not create any interest in or

charge on the property. As per Section 17(2)(v)

of the Registration Act with reference to

Section 1(b) and (c), that an

agreement/document simplicitor merely

creating a right to obtain another document,

was saved from compulsory registration. It is

submitted that thus prior to the amendment

of 2012 and after the amendment, an

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Agreement to Sell simplicitor or reciting

payment of earnest money was not required to

be registered. For these savings, an Agreement

to Sell would also have required registration,

as it is a document affecting immovable

property. It is submitted that now after the

2012 amendment, an Agreement to Sell for

Rs.100/­ or upwards is to be compulsorily

registered. An agreement recital for payment of

advance is also to be compulsorily registered

as the “explanation” in Section 17(2)

introduced by 1927 amendment after Dayal

Singh’s case, has been omitted by the present

amendment. The advance amount and sale

consideration are part and parcel of the

transactions between the parties.

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3.4 It is submitted that as per Section 49(a) and

(c) of the Registration Act, a document

requires to be registered, if not registered shall

not affect the immovable property comprised

therein and shall not be received as evidence

of any transaction affecting such property. It

is submitted that prior to 2012 amendment,

when an Agreement to Sell was not required to

be registered, Section 49(a) and (c) had no

operation in relation to an Agreement to Sell.

So an unregistered Agreement to Sell had no

restriction in being received as evidence of any

transaction affecting such immovable property

or affecting immovable property as such.

Thus, the terms of the document and the

transaction embodied in it could be relied on

in its entirety in any proceeding in the pre­

amendment era. It is submitted that however

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 now after the amendment, Section 49(a) and

(c) of the Registration Act which are both

substantive law and rule of evidence, apply to

an unregistered Agreement to Sell and it shall

not affect immovable property and shall not be

received as evidence of transaction affecting

immovable property.

3.5 It is further submitted by the learned counsel

for the defendant that if the interpretation of

the Hon’ble High Court given in the impugned

order is followed, then the same would render

the Amendment Act, 2012 otiose and

meaningless, simply because the situation

before the said amendment was exactly as has

been laid down in the impugned order. The

legislative intent behind making an Agreement

to Sell, a compulsorily registrable document

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 has been completely ignored by the Hon’ble

High Court.

3.6 It is submitted that after introduction of a

specific provision relating to Agreement to Sell

in Section 17(1)(g) of the Act, and in the

absence of any amendment in Section 17(2) to

include clause (g) also within its fold, Section

17(2)(v) will only operate in relation to

documents covered under the general

provision of Clauses (b) and (c) of sub­section

(1). it is submitted that in that sense Section

17(2)(v) will apply to all other agreements to

mortgage, to lease, to release, to exchange etc.

but will not apply to an Agreement to Sell.

3.7 Making above submissions, it is prayed to

allow the present appeal and quash and set

aside the impugned order passed by the

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 Hon’ble High Court and to restore the order

passed by the learned Trial Court.

4. While opposing the present appeal, learned

counsel appearing on behalf of original

plaintiff has heavily relied upon the proviso to

Section 49 of the Registration Act which

specifically provides that an unregistered

document affecting the immovable property

and required by the Registration Act to be

registered may be received as evidence of a

contract in a suit for specific performance

under Chapter­II of the Specific Relief Act or

as evidence of any collateral transaction not

required to be affected by registered

instrument.

4.1 It is submitted that as rightly observed and

held by the Hon’ble High Court though Section

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 17(1) of the Registration Act has been

amended by the Tamil Nadu Act, 2012 by

inserting Section 17(1)(g), making the

Agreement to Sell/ Agreement affecting any

immovable property compulsorily required to

be registered, there is no corresponding

amendment to Section 49 more particularly

proviso to Section 49 of the Registration Act.

4.2 It is further submitted that even the object

and purpose of Tamil Nadu Amendment Act,

2012 more particularly inserting Section 17(1)

(g) is required to be considered which has

been elaborately dealt with and considered by

the Hon’ble High Court in the impugned

judgment and order. It is submitted that a

perusal of statement of objects and reasons to

the Act No.29 of 2012 would suggest that

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 primarily the amendment has been introduced

by the State of Tamil Nadu by reason of the

fact that instruments of agreement relating to

sale of immovable property, instruments of

power of attorney relating to immovable

property and instruments evidencing

agreement of deposit of title deeds, which were

not registrable were resulting in loss to the

exchequer as the public were executing these

documents on white paper or on stamp paper

of nominal value.

4.3 With the above submissions and heavily

relying upon the proviso to Section 49 of the

Registration Act, it is prayed to dismiss the

present appeal.

5. We have heard the learned counsel appearing

on behalf of respective parties at length. The

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 short question posed for the consideration of

this Court is effect of Section 17(1)(g) of the

Registration Act applicable to the State of

Tamil Nadu by which Section 17(1)(g) of the

Registration Act has been inserted and

instruments of agreement relating to sale of

immovable property of the value of Rs.100/­

and upwards is made compulsorily registrable

and whether such unregistered agreement

relating to sale of immovable property can be

received in evidence in a suit for specific

performance?

6. While answering the aforesaid issues and

appreciating the submissions made by learned

counsel appearing on behalf of the respective

parties, Section 17 of the Registration Act,

1908, as applicable prior to the Registration

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 (Tamil Nadu Amendment) Act, 2012 and

Section 17 post Amendment Act, 2012, are

required to be referred to which are as under.

7. Section 17 of the Registration Act, 1908, post

Tamil Nadu Amendment Act, 2012 reads as

under :

“17. Documents of which registration is

compulsory.—(1) The following documents shall be
registered, if the property to which they relate is
situate in a district in which, and if they have been
executed on or after the date on which, Act No. XVI
of 1864, or the Indian Registration Act, 1866, or the
Indian Registration Act, 1871, or the Indian
Registration Act, 1877, or this Act came or comes
into force, namely:—

(a) instruments of gift of immovable property;

(b) other non­testamentary instruments which

purport or operate to create, declare, assign, limit or
extinguish, whether in present or in future, any
right, title or interest, whether vested or contingent,
of the value of one hundred rupees and upwards,
to or in immovable property;

(c) non­testamentary instruments which

acknowledge the receipt or payment of any
consideration on account of the creation,

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declaration, assignment, limitation or extinction of
any such right, title or interest; and

(d) leases of immovable property from year to year,

or for any term exceeding one year, or reserving a
yearly rent;

[(e) non­testamentary instruments transferring or

assigning any decree or order of a Court or any
award when such decree or order or award
purports or operates to create, declare, assign, limit
or extinguish, whether in present or in future, any
right, title or interest, whether vested or contingent,
of the value of one hundred rupees and upwards,
to or in immovable property:]

Provided that the [State Government] may, by order

published in the [Official Gazette], exempt from the
operation of this sub­section any lease executed in
any district, or part of a district, the terms granted
by which do not exceed five years and the annual
rents reserved by which do not exceed fifty rupees.

[(1A) The documents containing contracts to transfer

for consideration, any immovable property for the
purpose of section 53A of the Transfer of Property
Act, 1882 (4 of 1882) shall be registered if they
have been executed on or after the commencement
of the Registration and Other Related laws
(Amendment) Act, 2001 (48 of 2001) and if such
documents are not registered on or after such
commencement, then, they shall have no effect for
the purposes of the said section 53A.]

(2) Nothing in clauses (b) and (c) of sub­section (1)

applies to—

(i) any composition deed; or

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(ii) any instrument relating to shares in a joint stock
Company, notwithstanding that the assets of such
Company consist in whole or in part of immovable
property; or

(iii) any debenture issued by any such Company

and not creating, declaring, assigning, limiting or
extinguishing any right, title or interest, to or in
immovable property except in so far as it entitles
the holder to the security afforded by a registered
instrument whereby the Company has mortgaged,
conveyed or otherwise transferred the whole or part
of its immovable property or any interest therein to
trustees upon trust for the benefit of the holders of
such debentures; or

(iv) any endorsement upon or transfer of any

debenture issued by any such Company; or

(v) [any document other than the documents

specified in sub­section (1A)] not itself creating,
declaring, assigning, limiting or extinguishing any
right, title or interest of the value of one hundred
rupees and upwards to or in immovable property,
but merely creating a right to obtain another
document which will, when executed, create,
declare, assign, limit or extinguish any such right,
title or interest; or

(vi) any decree or order of a Court [except a decree

or order expressed to be made on a compromise
and comprising immovable property other than that
which is the subject­matter of the suit or
proceeding]; or

(vii) any grant of immovable property by

[Government]; or

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(viii) any instrument of partition made by a
Revenue­Officer; or

(ix) any order granting a loan or instrument of

collateral security granted under the Land
Improvement Act, 1871, or the Land Improvement
Loans Act, 1883; or

(x) any order granting a loan under the

Agriculturists, Loans Act, 1884, or instrument for
securing the repayment of a loan made under that
Act; or

[(xa) any order made under the Charitable

Endowments Act, 1890 (6 of 1890), vesting any
property in a Treasurer of Charitable Endowments
or divesting any such Treasurer of any property; or]

(xi) any endorsement on a mortgage­deed

acknowledging the payment of the whole or any
part of the mortgage­money, and any other receipt
for payment of money due under a mortgage when
the receipt does not purport to extinguish the
mortgage; or

(xii) any certificate of sale granted to the purchaser

of any property sold by public auction by a Civil or
Revenue­Officer.

[Explanation.—A document purporting or operating

to effect a contract for the sale of immovable
property shall not be deemed to require or ever to
have required registration by reason only of the fact
that such document contains a recital of the
payment of any earnest money or of the whole or
any part of the purchase money.]”

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8. By Tamil Nadu Amendment Act, 2012, Section

17(1)(g) has been inserted and “explanation” to

Section 17(2) has been omitted. Section 17(1)

(g) as inserted by Tamil Nadu Amendment Act,

2012, reads as under :

“17(1)(g) instruments of agreement relating to sale

of immovable property of the value of one hundred
rupees and upwards.”

9. Thus, on and after the Tamil Nadu

Amendment Act, 2012, as per Section 17(1) (g),

instrument of agreement relating to sale of

immovable property of the value of Rs.100/­

and upwards is required to be registered

compulsorily. However, despite the same and

despite the “explanation” to sub­section (2) of

Section 17 has been omitted, there is no

corresponding amendment made to Section 49

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 of the Registration Act. Section 49 of the

Registration Act is as under :

“49. Effect of non­registration of

documents required to be registered.—No
document required by section 17 [or by any
provision of the Transfer of Property Act, 1882
(4 of 1882)], to be registered shall—
(a) affect any immovable property comprised
therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction
affecting such property or conferring such
power,
unless it has been registered:
[Provided that an unregistered document
affecting immovable property and required by
this Act or the Transfer of Property Act, 1882 (4
of 1882), to be registered may be received as
evidence of a contract in a suit for specific
performance under Chapter II of the Specific
Relief Act, 1877 (3 of 1877) , *** or as evidence
of any collateral transaction not required to be
effected by registered instrument.]”

10. Thus, as per proviso to Section 49, an

unregistered document affecting the

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 immovable property and required by

Registration Act to be registered may be

received as evidence of a contract in a suit for

specific performance under Chapter­II of the

Specific Relief Act, 1877, or as evidence of any

collateral transaction not required to be

effected by registered document.

11. At this stage, the primary statement of objects

and reasons to the Tamil Nadu Amendment

Act, 2012, is also required to be referred to and

considered. The primary statement of objects

and reasons seem to suggest that amendment

has been introduced by the State of Tamil

Nadu bearing in mind the loss to the

exchequer as public were executing the

documents relating to sale of immovable

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 property etc. on white paper or on stamp paper

of nominal value.

12. At this stage, it is required to be noted that the

proviso to Section 49 came to be inserted vide

Act No.21 of 1929 and thereafter, Section

17(1A) came to be inserted by Act No. 48 of

2001 with effect from 24.09.2001 by which the

documents containing contracts to transfer or

consideration any immovable property for the

purpose of Section 53 of the Transfer of

Properties Act is made compulsorily to be

registered if they have been executed on or

after 2001 and if such documents are not

registered on or after such commencement,

then there shall have no effect for the purposes

of said Section 53A. So, the exception to the

proviso to Section 49 is provided under Section

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 17(1A) of the Registration Act. Otherwise, the

proviso to Section 49 with respect to the

documents other than referred to in Section

17(1A) shall be applicable.

13. Under the circumstances, as per proviso to

Section 49 of the Registration Act, an

unregistered document affecting immovable

property and required by Registration Act or

the Transfer of Property Act to be registered,

may be received as evidence of a contract in a

suit for specific performance under Chapter­II

of the Specific Relief Act, 1877, or as evidence

of any collateral transaction not required to be

effected by registered instrument, however,

subject to Section 17(1A) of the Registration

Act. It is not the case on behalf of either of the

parties that the document/ Agreement to Sell

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 in question would fall under the category of

document as per Section 17(1A) of the

Registration Act. Therefore, in the facts and

circumstances of the case, the High Court has

rightly observed and held relying upon proviso

to Section 49 of the Registration Act that the

unregistered document in question namely

unregistered Agreement to Sell in question

shall be admissible in evidence in a suit for

specific performance and the proviso is

exception to the first part of Section 49.

14. In view of the above and for the reasons stated

above, the present appeal fails and the same

deserves to be dismissed. It is accordingly

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 dismissed. There shall be no orders as to

costs.

…………………………………J.
(M. R. SHAH)

…………………………………J.
(KRISHNA MURARI)
New Delhi,
April 10, 2023

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